Delhi High Court
Management Of Horticulture Department ... vs Trilok Chand & Anr. on 4 December, 1999
Equivalent citations: 2000IAD(DELHI)416, 82(1999)DLT747, 2000(52)DRJ278, [2000(85)FLR41], (2000)ILLJ614DEL
Author: A.K. Sikri
Bench: A.K. Sikri
ORDER A.K. Sikri, J.
1. A common question of law arises in all these petitions. Petitioner in all these petitions is same. These petitions are filed by the management of Horticulture Department, Delhi Administration through its Development Commissioner. In all these cases reference was made to the Labour Courts for adjudication regarding the legality and justifiability of the termina- tion of the services of workman respondent No.1 in each petition. By the impugned awards which are pronounced on different dates by different Labour Courts it is held that the termination of the services of the concerned workmen is illegal and it was also held that the concerned workmen are entitled to reinstatement with continuity in service and full back wages. The awards are not challenged on merits and in all these cases two legal submissions are made by the petitioner which are as follows:-
(1) That Horticulture Department is not "industry" within the meaning of Section 2(j) of the Industrial Disputes Act (hereinaf- ter referred to as the Act, for short) and therefore reference to the Labour Court for adjudication and consequently the award given by the Labour Court is null, void and without jurisdiction.
(2) All these workmen were appointed as daily wagers for a specific period. After expiry of the said period their services were dispensed with and such dispensation does not amount to "retrenchment" within the meaning of section 2(r) of the Act. Therefore, according to the petitioner, it could not be said that termination is illegal for non-compliance of provision of Section 25(f) of the Act.
2. Since aforesaid questions are common in afore-mentioned writ peti- tions, all these cases were heard together and are disposed of by a common judgment. The facts involved in all these cases is also more or less the same. Therefore, to understand and appreciate the controversy, it would be sufficient to notice the facts in one of the writ petitions. Accordingly, facts of Civil Writ Petition No. 2691 of 1999 are taken as basis.
3. By Notification No. F. 24(2749)/89- Lab. 21000-05 dated 5th July, 1989 the appropriate government referred the dispute regarding termination of workmen Shri Trilok Chand with the following terms of reference:-
"Whether the services of Sh. Trilok Chand have been terminated illegally and/or unjustifiably by the management and if so to what relief is he entitled and what directions are necessary in this respect?"
4. On receiving the reference notices were issued to both the parties. Workmen filed their statement of claim in which he averred that he was employed as Mali/Beldar w.e.f. 1st November, 1986. His counter-parts were being treated as regular employees although they were doing identical work. His services were terminated w.e.f. 29th March, 1989 without assigning any valid reason. Cause of his termination was that he was directed to work at the residence of Shri D.P. Saxena, an Officer of the management where he was meted out with most derogatory and insulting behavior by Mrs. Saxena. She wanted to use him as domestic servant. Job against which he was working was of regular and permanent nature. Employing persons on such jobs as casual/daily rated/muster roll for indefinite period, amounts to unfair labour practice and sheer exploitations. Juniors to him have been retained in service. No notice pay was offered or paid, no notice was given, no service compensation was offered or paid. The termination is violative of Section 25-F, G & H of the Act. He sent a demand notice dated 9th April, 1989 to the management but to no effect. He stated that he is unemployed since the date of termination. Hence, he prayed for reinstatement with continuity and full back wages.
5. In the written statement filed by the petitioner preliminary objec- tions were taken to the effect that petitioner was not "industry" and respondent was not workman. It was also pleaded that respondent was engaged on daily wages for seasonal casual labour work of assisting regular malis. His services were dispensed with after the seasonal causal labour work was over and therefore his termination did not amount to retrenchment. Allega- tions of the respondent to the effect that he was asked to work in the residence of Mr. D.P. Saxena or he was maltreated was denied. After the completion of pleadings Labour Court framed the following issues:-
(i) Whether the petitioner is a Workman within Section 2(s) of the Industrial Disputes Act?
(ii) Whether the respondent is not an industry?
(iii) As in the terms of reference.
6. Workman led his evidence by way of affidavit in which he reiterated the averments made in the statement of claim. He was duly cross-examined. However, thereafter petitioner started absenting and did not lead its evidence. It was proceed ex-parte and the evidence was closed and arguments were heard and impugned award dated 14th August, 1998 was passed by the Labour Court. On issue no.1 it held that respondent was a workman. On issue No. 2 it held that petitioner was an "industry". While deciding issue No. 3 the Labour Court concluded that since there was no allegation of miscon- duct, no charge-sheet was issued and no enquiry was held, termination of respondent's services was illegal and unjustified. Accordingly, it held that respondent was entitled to reinstatement with continuity of service and full back wages. Against this award, the present writ petition is filed.
7. It may be significant to notice at this stage that the petitioner did not move any application for setting aside the ex-parte award. Even in this writ petition petitioner has not challenged the order of Labour Court proceeding ex-parte against the petitioner-management. Thus it is not the case of the petitioner that the absence of petitioner before the Labour Court was for any valid or genuine reasons or there was any sufficient cause for no-appearance. The award is challenged on the grounds mentioned above, on the basis of the material on record. Thus while deciding this case it is to be borne in mind that petitioner has not led any evidence before the Labour Court in support of its case.
The two grounds on which the award is challenged and the submissions which were made at the time of argument are already noticed above. Now I proceed to deal with these grounds of challenge.
8. Insofar as the claim of the petitioner that it is not an "industry" within the meaning of Section 2(j) of the Act is concerned, the petitioner has not adduced any evidence to show that it is not an "industry". Mr. Anil Grover, learned counsel for the petitioner argued that even in the absence of any material these question can be determined inasmuch as Horticulture Department being a unit of Development Department which is an organ of Delhi Administration (now National Capital Territory of Delhi) per se such Department does not coming within the expression "industry" as defined under Section 2(j) of the Act. I am not inclined to accept this submission of the petitioner. Merely because Horticulture Department is a unit of Development Department does not mean that it would not be an "industry" and therefore would be excluded from the purview of the Act.
9. Seven Judges bench of the Supreme Court in the case of Bangalore Water Supply and Sewage Board Vs. Rajappa laid down triple test for determining whether a particular establishment is "indus- try" or not. The triple test is where: (a) systematic activity; (b) organized by cooperation between employer and employee (the direct and substantial element is commercial); (c) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not merely spiritual or religious blunt inclusive of material things or services geared to celestial bliss i.e. making on a large scale of (prasad or food) prima facie, there is an industry in that enterprise.
10. The Apex Court further held that absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector. It also held that the true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations. It further held that if the organisation is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.
11. Consequently, the Court held that professions, clubs, educational institutions, cooperatives, research institutions, charitable projects and other kindred adventures, if they fulfill the triple test stated above, would fall within Section 2 of the Act. Ofcourse, a restricted category of professions, clubs, cooperatives and even gurukulas and research labs, may qualify for exemption if in simple ventures substantially and going by the dominant nature criterion substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit. If in a pious or altruist mission many employ themselves, free or for small honorarium, such a lawyers volunteer- ing to run a free legal service clinic or doctors serving in their spare hours in a free medical center or aphanites working at the bidding of the holiness, divinity or like personality and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship then the institution is not an industry, even if stray servants, manual or technical, are hired. Of- course, following this principle, in many cases it has been held that particular establishments are not "industry". However, it depends on the facts and circumstances of each case and as far as present case is concerned no material is produced by the petitioner before the Labour Court.
12. In view of the aforesaid judgment it was for the petitioner to put on record sufficient material to prove as to how it was not an "industry" when triple test laid down in the aforesaid case is clearly satisfied. Infact not even an attempt was made either in the pleadings or by adducing evi- dence to show as to how the petitioner was not "industry". What is stated is that in the written statement is that Horticulture Department being a unit of Development Organisation, is not an "industry". Merely because it is an unit of Development Department it would not cease to be an "industry". Mr. Anil Grover, learned counsel for the petitioner tried to argue the petitioner is discharging..... Moreover it may be noticed that of the Labour Court has relied upon the judgment of Supreme Court in the case of Chief Conservator of Forest and another Vs. Jagannath Maruti Kondhare and others cited in 1996 SCC (L&S) 500 which is a directly on this point.
13. A perusal of the said judgment would show that the Pachgaon Parwati Scheme was framed as per the Government resolution based on the policy decision taken in April, 1976. The Scheme was to be initially for a period of 5 years and an area of about 245 hectares situated on a hill plateau on the southern outskirts and within easy access of Pune City was selected for creation of a park under Bio aesthetic development for the benefit of the urban population. It was primarily intended to fulfill Bio aesthetic recrea- tional and educational aspirations of the people. The appellant Conservator of Forests contended that the Pachgaon Parwati Scheme as well as the social forestry work undertaken in Ahmednagar District had to be regarded as part of inalienable or sovereign functions of the State and therefore not an industry within the meaning of the Industrial Disputes Act, 1947 or the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.
14. This contention was repelled by the Supreme Court. It relied upon the decision in the case of N. Nagendra Rao and others Vs. State of Andhra Pradesh observed as under:-
"As to which function could be, and should be, taken as regal or sovereign function has been recently examined by a Bench of this Court, to which one of us (Hansaria, J) was a party. This was in N. Nagendra Rao & Co. Vs. State of A.P., in which case Sahai, J. speaking for the Bench examined this question in detail in the background of the stand of the respondent-State pleading absence of vicarious liability because of the doctrine of sovereign immunity. This aspect has been dealt in paras 21 to 24. Para 21 opens by saying that the old and archaic concept of a sovereignty does not survive as sovereignty now vests in the people. It is because of this that in the aforesaid Australian case the distinction between sovereign and non-sovereign functions was categories as regal and non-regal. In some cases the expression used is State function, whereas in some, governmental function.
We may not go by the labels. Let us reach the hub. And the same is that the dichotomy of sovereign and non-sovereign functions does not really exist - it would all depend on the nature of the power and manner of its exercise, as observed in para 23 of Nagendra Rao case. As per the decision in this case, one of the tests to determine whether the executive function is sovereign in nature is to find out whether the State is answerable for such action in courts of law. It was stated by Sahai, J. that acts like defense of the country, raising armed forces and maintaining functions which are indicative of external sovereignty and are political in nature. they are, therefore, not amendable to the jurisdiction of ordinary civil court inasmuch as the State is immune from being sued in such matters. But then, according to this decision the immunity ends there. It was then observed that in a welfare State functions of the State are not only the de- fence of the country or administration of justice or maintaining law and order but extends to regulating and controlling the activities of people in almost every sphere, educational, commer- cial, social, economic, political and even marital. Because of this the demarcating line between sovereign and non-sovereign powers has largely disappeared.
The aforesaid shows that if we were to extend the concept of sovereign function to include all welfare activities as contended on behalf of the appellants, the ratio in Bangalore Water Supply case would get eroded, and substantially. We would demur to do so on the fact of what was stated in the aforesaid case according to which except the strictly understood sovereign function, welfare activities of the State would come within the purview of the definition of industry; and, not only this, even within the wider circle of sovereign function, there may be an inner circle encom- passing some units which could be considered as industry if substantially severable."
15. Applying the aforesaid test to the facts before it' the Court further held that:
The Schemes in question cannot be regarded as a part of inalienable or inescapable function of the State for the reason that the scheme was in- tended even to fulfill the recreational and educational aspirations of the people. There can be no doubt that such a work could well be undertaken by an agency which is not required to be even an instrumentality of the State.
Therefore, the said schemes cannot be regarded as a part of the sovereign function of the State, and so, it was open to the respondent-workman to invoke the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Ahmednagar District. There was, therefore, no threshold bar in knocking the door of the Industrial Courts by the respondents making a grievance about adoption of unfair labour practice by the appellants.
16. This judgment clinches the issue. Without any shadow of doubt it can be held that petitioner is "industry". The contention of the petitioner that it is not "industry" is, therefore, rejected.
17. Coming to the second ground of challenge to the impugned award my conclusion is that this petition is bound to fail on this ground as well. My reasons for this conclusions are :-
First, there is no material placed by the petitioner before the Labour Court in support of its contention that the workman were appointed as seasonal worker for some specified period. On the other hand, workman have given the evidence to the effect that they were appointed for indefinite period and were performing regular nature of job. It is also stated that they worked for more than 240 days in a calender year and the total period of service was two years or more. In the case of the workman in CW. 2691 of 1999 the averment of the workman Shri Trilok Chand was that he was taken into employment as Mali/Beldar w.e.f. 1st November, 1986 and he worked continuously when his services were terminated w.e.f. 29th March, 1989 without assigning any valid reason. Similar statements are made by other workmen in other writ petitions. This version of workmen remained unrebut- ted. They having worked for more than 240 days continuously, their termina- tion, world clearly be violative of Section 25-F of the Act. Further such person would clearly come within the definition of workman under Section 2 of the Act. Similar view has been taken before this Court in the case of Municipal Corporation of Delhi Vs. Shri Sukhvir Singh and others report- ed in 1994 LLR 332 on similar facts.
18. My aforesaid conclusion is further fortified by the judgment of Su- preme Court in the case of L. Robert D'Souza Vs. Executive Engineer, South- ern Railway and another reported in 1982 SCC (L&S) 124. In that case apex Court held that even the casual or seasonal workman who rendered continued service for one year or more could not be retrenched on such ground without complying with the requisition of Section 25-F of the Act. In another case entitled Rattan Singh Vs. Union of India . It was held by the Apex Court that provision of Section 25-F were applicable to termination of even a daily rated workman who had continuously served for requisite statutory minimum period for a year and termination of serv- ices of such a workman without complying with provisions of Section 25-F was illegal. To the same effect is the judgment of Supreme Court in the case of Samishta Dubey Vs. City Board, Etawah reported in 1989 LLR 2160 and Municipal Corporation of Delhi Vs. Praveen Kumar Jain reported in 1998 (8) SCC 468.
19. Notwithstanding the aforesaid position in law Mr. Anil Grover, learned counsel appearing on behalf of the petitioner argued that respondent is not to be treated as workman and is not entitled to the benefit of the provi- sion of Section 25-F of the Act and in support of his submission he tried to draw sustenance from another judgment of Supreme Court in the case of Himanshu Kumar Vidyarthi and others Vs. State of Bihar and others reported in ..... In this case, decided by a Division Bench, no doubt certain observations were made by the Supreme Court which give the impression that temporary working of daily wages ... would not be considered to be re- trenched under the Act. However, a close look would show that the case was mainly decided on the ground that the concerned department namely, Cooperative Training Institute, deogarh was not to be treated as "industry" within the meaning of Section 2(j) of the Act and further in this case Supreme Court did not take into consideration the earlier case decided by it hold- ing to the contrary and as noticed above. Not only this even in the follow- ing subsequent judgments, Supreme Court has taken the view that provision of Section 25-F would be applicable even in a case of daily rated workman. These cases are:
1. Rattan Singh Vs. Union of India .
2. Municipal Corporation of Delhi Vs. Praveen Kumar Jain .
3. Samishta Dubey Vs. Etawah reported in 1999 LLR 460 (SC).
20. In view of the aforesaid restatement of law as recent as in 1999 as well, I respectfully follow the same in preference to the view expressed in the case of Himanshu Kumar Vidyarthi and others Vs. State of Bihar and others (supra). Accordingly, this point is also decided against the petitioner.
21. No other point was canvassed before me. Accordingly, the writ petition are dismissed with cost which is quantified at Rs.5000/.